Recent industry insider AP Abacus cited sources from several Ethereum spot ETF issuers, claiming that two more rounds of S-1 document revisions may be required, with the approval date likely to fall in late July. As the potential approval time draws closer, traders have begun to bet on the price trend of Ethereum ETFs after approval.
Analysts from the cryptocurrency research institution K33 Research believe that the Ethereum ETF will become a significant driving force for the price of Ethereum, and the performance of Ethereum will surpass Bitcoin in the weeks following the ETF’s listing in the United States.
According to a report by Cointelegraph, K33 analysts Vetle Lunde and David Zimmerman stated in their latest report that Ethereum will “immediately fall” after the launch of the ETF, but as with Bitcoin, the price of Ethereum will also rise with the influx of new funds.
On the other hand, $8.5 billion worth of Bitcoin will begin to be returned to the creditors of the now-defunct exchange Mt. Gox starting this week, and with the German and US governments continuously selling confiscated Bitcoin, the price of Bitcoin will be suppressed. Therefore, Ethereum has the opportunity to outperform Bitcoin during this period.
“With the arrival of summer and the accumulation of funds, the ETF is a strong catalyst for the relative strength of ETH. I firmly believe that the current ETH/BTC price is cheap for patient traders… We maintain a bullish outlook on ETH and expect that within 5 months after the launch, the net inflow will reach 0.75-1% of the circulating supply of ETH.”
Furthermore, Vetle Lunde and David Zimmerman noted that the open interest in Ethereum futures surged significantly after the SEC approved the 19b-4 document for the Ethereum ETF in May, indicating that many traders are using substantial leverage to bet on the potential price trend of ETH before the launch of the ETF.
However, another interpretation in the market is that the approval of the Ethereum ETF provides traders and hedge funds with arbitrage opportunities, hence a large number of institutions are using the negative premium of the Grayscale Ethereum Trust (ETHE) relative to the market price of Ethereum for hedging arbitrage.